Richard Boyd Barrett
Question:90. Deputy Richard Boyd Barrett asked the Minister for Finance his views and recommendations with regard to introducing a wealth tax;; and if he will make a statement on the matter. [51575/23]
View answerThursday, 23 November 2023
Questions (90)
Written answers
As the Deputy should be well aware, wealth can be taxed in a variety of ways, many of which are already levied here in Ireland.
These include Capital Gains Tax and Capital Acquisitions Tax, which are, in effect, taxes on wealth, in that they are paid by an individual or company on the disposal of an asset or the acquisition of an asset through gift or inheritance.
There is also Deposit Interest Retention Tax, which is currently charged at 33%, with limited exemptions, on interest earned on deposit accounts.
We should also not forget Local Property Tax, which is a tax based on the market value of residential properties.
Yet another is certain forms of Stamp Duty, which is charged in a number of ways, including on the acquisition of shares, stocks and marketable securities of Irish registered companies, and on the acquisition of property both residential and non-residential.
In total, the net receipts from these forms of tax came to approximately €4.32 billion in 2022, representing 5.2 per cent of the total net receipts.
It follows that any revenue raised from a wealth tax, no matter what form it takes, may not therefore be additional to the existing forms of wealth taxation, as revenues from those taxes could be affected by the introduction of a wealth tax.
Also, in examining the topic of a wealth tax, the Commission on Taxation & Welfare, which reported in 2022, identified challenges that would impede the implementation of such a tax. They concluded that a new tax on net wealth should not be introduced without first attempting to substantially amend Ireland’s existing taxes on capital and wealth. As an alternative to introducing a new tax on wealth, the Commission believes the more productive route is to re-examine the primary existing forms of wealth tax, CGT and CAT. These are taxes on wealth that have well-established, but distinct, bases and are well-understood in their operation.
In addition to wealth taxes, the Government takes action against inequality through our tax and welfare system. For instance, the strong redistributive role of the Irish tax and welfare system is evident in the range of supports that were introduced to help mitigate the impact of the Covid-19 pandemic and in the series of measures designed to limit the impact of the current cost of living pressures.
Ireland has one of the most progressive systems of taxes and social transfers of any EU or OECD country, which contributes to the redistribution of income and to the reduction of income inequality.
In 2024 it is projected that the top one per cent of taxpayer units, who are those with annual income in excess of €290,000, will pay just over 24 per cent of total Income Tax and USC. This is a very large proportion of the total Income Tax and USC take from such a small cohort of taxpayers. In comparison, 80 per cent of taxpayer units, which is the cohort of income earners with annual income of less than €69,500 and account for about 2.74 million taxpayer units, will pay 21 per cent of total Income Tax and USC.
In conclusion, I can assure the Deputy that all taxes and potential taxation options are kept under constant consideration and it remains a priority of mine to ensure that Ireland maintains its progressive taxation system.